04 July 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Consumer Credit Act 1974

The Consumer Credit Act 1974 (as amended by the Consumer Credit Act 2006) regulates consumer credit and consumer hire agreements. Its protections apply to agreements between traders and individuals, sole traders, partnerships and unincorporated associations, but not agreements made between traders and corporate bodies such as limited companies.

The Act lays down rules covering:

• the form and content of agreements;
• credit advertising;
• the method of calculating the Annual Percentage Rate (APR) of the Total Charge for Credit;
• the procedures to be adopted in the event of default, termination, or early settlement; and
• the unfair relationships test.

The Act also requires that all traders who make regulated agreements obtain licences from the Office of Fair Trading (OFT). Credit brokers, debt advisors and others, may also require licences. From October 2008, this licensing requirement extends to credit information (repair) and debt information service providers.

Appeals can be made against decisions of the OFT that a person is not fit or competent to hold a consumer credit licence. From 6 April 2008, appeals under the Consumer Credit Act are made to the Tribunals Service (rather than the BERR Secretary of State).

Local trading standards departments and the OFT enforce the Act. The OFT also produces guidance about the Act and its regulations. For further information contact local trading standards departments or the Office of Fair Trading.

Consumer Credit Act 2006

Many of the proposals contained within the Consumer Credit White Paper (published in December 2003), required primary legislation. The Government took these proposals forward in the Consumer Credit Act 2006, which we expect to be fully implemented by October 2008. (see related links).

© Crown copyright 2008